In recent weeks, the price of gold has soared to record-breaking levels, crossing the $2,190 per ounce mark and bringing joy to many investors. Though silver hasn’t kept up with gold’s upward trend, it has recently spiked above $25 per ounce, giving silver stackers some hope that their wave could be coming soon.

Nicky Shiels, a metals strategist at MKS PAMP, pointed out the historical relationship between gold and silver prices and the fact that silver could be setting up for a surge, based on historical trends. According to Shiels, the average gold/silver ratio suggests that silver should be priced over $32 per ounce at the current gold levels, indicating a potential undervaluation of silver in the market.

Sean Lusk, co-director of commercial hedging at Walsh Trading has delved into the factors influencing silver's lackluster performance. Unlike previous periods of silver outperformance driven by investment demand, the current rally in gold is primarily fueled by sovereign purchases and central bank buying aimed at supporting currencies. This shift in demand dynamics has limited the secondary effects that historically boosted silver prices following gold rallies. Lusk highlighted that while gold's strength has provided a stable price floor for silver, it has yet to translate into the kind of upside momentum that would catch the interest of silver bugs.

Kevin Grady, president of Phoenix Futures and Options, concurred with the assessment that central bank buying is a key driver of the gold rally. He noted that while fund buying typically impacts both gold and silver prices, the current trend indicates a divergence, with silver not experiencing the same level of buying activity as gold. Despite the challenges faced by silver, analysts remain optimistic about its future prospects.

In a video interview with Yahoo Finance, George Milling-Stanley, the Chief Gold Strategist with State Street Global Advisors, offered another perspective. He said: "We could easily be looking at a significant jump, tens of dollars, $50, something of that order. I don't know what it's going to do. I think it's more a case of anticipation of when that rate cut is coming that is going to be really the driver of the price going forward.”